Junk bonds of Trans World Airlines Inc. swooned yesterday as the ailing carrier confirmed a $420 million bid for bankrupt Pan Am Corp.

TWA owner Carl Icahn, who has been dickering with bondholders for months to restructure the company's debt, is now trying to win over Pan Am creditors as well. TWA, based in Mount Kisco, N.Y., yesterday said Mr. Icahn has offered to top an offer from Delta Air Lines Inc. for certain Pan Am assets, making a total of $420 million available to Pan Am's creditors.

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